Guatemala Scraps Its Property Tax on Homes: What Foreign Owners Need to Know
Guatemala: Property & Tax
Key Facts
- —Decreto 18-2026 sets the IUSI property tax to zero on residential and mixed-use property. It was published in the official gazette on 28 August 2026.
- —Commercial buildings keep paying, at three, six and nine per thousand across three value bands — the top rate bites above Q1 million, about US$131,161.
- —The ban on cutting services over unpaid tax starts in late November 2026; the zero rate and the new commercial table take effect on 8 January 2027, with income-tax and stamp-duty changes dated 1 January 2027.
- —Registration duties remain. A zero rate does not remove your obligation to register the property with your municipality.
- —Individuals selling a property are exempted from the 10 percent capital-gains tax, and municipalities can no longer cut water, rubbish collection or street lighting over unpaid tax.
Guatemala has just scrapped the annual property tax on homes — including homes owned by foreigners. If you own, rent out, or are thinking of buying in Antigua, the capital or the lake country, here is what Decreto 18-2026 actually does, when it bites, and what does not change.
What the decree actually changes
Guatemala’s Congress approved Decreto 18-2026 on 29 July 2026, amending Decreto 15-98, the Ley del Impuesto Único Sobre Inmuebles — the IUSI, the single annual tax on real estate collected by municipalities. President Bernardo Arévalo signed it on 28 August, and the Diario de Centro América published it the same day. Publication started every clock in the reform.
The headline: the IUSI rate on residential and mixed-use property is now zero. Mixed use covers a home with a small business attached, a common arrangement in Guatemala. Whatever your house is worth, the annual bill from the town hall disappears once the change takes effect.
Commercial property moves the other way. Buildings used for business pay three per thousand of assessed value up to Q500,000, about US$65,580; six per thousand up to Q1 million, about US$131,161; and nine per thousand above that. Conversions here use the Banco de Guatemala reference rate of Q7.62422 per dollar for 29 August.
The timetable now running
The gazette text staggers three clocks. The ban on conditioning municipal services on IUSI payment takes effect 60 days after publication, in late November 2026. The IUSI changes themselves — the zero rate for homes and the new commercial table — take effect 90 working days after publication, which Congress’s first secretary calculates as 8 January 2027; until then, owners must keep paying 2026 and prior-year bills under the old rules. The income-tax and stamp-duty changes are dated 1 January 2027.
Inside that window, four bodies must rebuild their systems: the municipalities, the finance ministry, the SAT tax agency and the cadastre directorate. Expect uneven implementation across 340 municipalities — some will update bills promptly, others will need chasing.
What foreign owners should do now
Keep your registration current. The zero rate removes the bill, not the registry: the duty to register the property with your municipality stays in force, and an unregistered property remains the classic source of fines and paperwork trouble at sale time.
If you are selling, the decree helps twice. Individuals are exempted from the 10 percent tax on the capital gain, effective 1 January 2027, removing a cost that used to be priced into every private sale. Combined with the zero IUSI, the carrying and exit costs of a Guatemalan home both fall.
If you own commercial space, budget the other way. A shop or office assessed above Q1 million moves to nine per thousand — the sharpest end of the new table. And if a municipality ever threatens to cut your water, rubbish collection or street lighting over a disputed bill, the decree now expressly bars that tactic.
Why the town halls are unhappy
Finance minister Jonathan Menkos puts the loss to municipalities at about Q1.2 billion a year, roughly US$157.4 million, and says the constitutional transfer formula cannot be reopened to replace it. The partial offset is a 3 percent stamp duty on second and subsequent property transfers, routed to municipalities through the SAT.
The impact is wildly uneven. An analysis by Icefi, the Central American fiscal studies institute, found 45 of 340 municipalities collected nothing at all in 2025 and reckons roughly 300 come out ahead once the stamp duty flows. Five heavy losers sit in and around the capital, where values are highest: Guatemala City, Mixco, Villa Nueva, Santa Catarina Pinula and San Miguel Petapa. The municipalities’ association, ANAM, has warned that local finances are at risk.
Could the courts stop it?
Objections are already on record. Icefi’s director called the law technically flawed and noted it passed without opinions from the finance ministry or the SAT; a development-foundation economist argues the different treatment of residential and commercial property could be unconstitutional.
One case is already at the Constitutional Court — filed by the Cabal caucus on 12 May 2026 — but it targets the original IUSI statute, not this decree. No separate action against Decreto 18-2026 itself has been reported. Plan on the reform taking effect, and treat any court surprise as exactly that.
When does Guatemala’s property tax on homes actually end?
The decree was published on 28 August 2026. The zero IUSI rate for residential and mixed-use property takes effect 90 working days later, on 8 January 2027 — until then, 2026 bills still stand. A ban on cutting municipal services over unpaid tax starts in late November 2026, and the new commercial rate table also begins on 8 January 2027.
Do foreign owners in Guatemala still pay the IUSI?
Once the change takes effect, no — the zero rate applies to residential and mixed-use property regardless of the owner’s nationality. What does not disappear is registration with the municipality. Commercial property keeps paying, at three, six and nine per thousand across value bands, with the top rate above Q1 million, about US$131,161.
What changes if I sell a property in Guatemala?
Individuals are exempted from the 10 percent tax on the capital gain. Municipalities, for their part, are barred from cutting water, rubbish collection or street lighting over unpaid tax — and a 3 percent stamp duty on second and subsequent transfers now flows to them through the SAT to offset their lost IUSI revenue.
Sources
- Diario de Centro América — Decreto 18-2026, published 28 August 2026
- Prensa Libre — timetable, municipal impact and reaction, August 2026
- Icefi — municipal collection analysis, 2025 data
- Banco de Guatemala — reference exchange rate Q7.62422 per US dollar, 29 August 2026
More: Expats across Latin America, every day from The Rio Times. See also: today’s LatAm Expat & Nomad Daily Guide and what the Caracas flight restart means for travelers.
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